Question

Send to Gradebook Question 2 View Policies Current Attempt in Progress The following information pertains to Parsons Co.: $% none $10 Preferred stock, cumulative: Par value per share $100 Dividend rate Shares outstanding 10.000 Dividends in arrears Common stock Par value per share Shares issued 112.000 Dividends paid per share $2.00 Market price per share $49.00 Additional paid-in capital $480,000 Unappropriated retained earnings (after closinel $290.000 Retained earnings appropriated for contingencies $290,000 Common treasury stock: Number of shares 10,000 Total cost $260,000 Net income $640,000 Compute (assume na changes in balances during the past year): (Round per share and ratios to 2 decimal plac eg. $15.25 ar 15.25%.) (a) Total amount of stockholders'equity in the balance sheets 061 Earnings per share of common stock per share (c) Book value per share of common stock per share

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Answer 1

(a) Total Amount of Stock holders Equity in balance sheet Preferred Stock, Cummulative (10,000 shares * $100) Common stock - (112,000 shares * $10) Additional Paid in capital Unappropriate Retained earnings after closing Retained earnings appropriate for contingencies Less: Treasury Stock $ 1,000,000.00 $ 1,120,000.00 $ 480,000.00 $ 290,000.00 $ 290,000.00 $ (260,000.00) $ 2,920,000.00 (b) Earnings per share of common stock Net Income Less : Preferred Dividend (10,000*100*8%) Net Income Attributable to common stockholders (A) 640,000.00 (80,000.00) 560,000.00 $ Number of shares Outstanding (112000 - 10000) (B) 102000.00 Shares 5.49 Per Share (C.) Book Value per share of common stock Common stock - (112,000 shares * $10) Additional Paid in capital Unappropriate Retained earnings after closing Retained earnings appropriate for contingencies Less : Treasury Stock $ $ $ $ $ 1,120,000.00 480,000.00 290,000.00 290,000.00 (260,000.00) Book Value of Common Stock (A) Number of shares Outstanding (112000 - 10000) (B) $ 1,920,000.00 102000.00 Shares $ 18.82 Per Share A (d) Payout Ratio of Common Stock Dividend per share (A) Earnings per share (B) 2.00 5.49 A Payout Ratio of Common Stock (A/B) 36.43% (e) Return on Common Stock Equity Net Income Attributable to common stockholders (A) Book Value of Common Stock (B) $ 560,000.00 $ 1,920,000.00 Return on Common Stock Equity = A/B 29.17%